The 3 year loss rule for the self-employed who are farmers.
If you are registered for self-assessment, have made a loss on your business for the last 3 years, but chose to offset this loss against PAYE tax paid, this article will be of interest.
If you file your own returns or the person filing the return for you does not fully understand ROS you could have an issue. The issue, I feel, is due to a flaw with the ROS system.
Under tax rules you can only offset a loss against other income for 3 years. If you make a loss in the 4th year you can only defer this loss to future year’s profits. You can avail of this deferment in the next 2 years.
If you decide to defer the loss in the current year (the 4th year of making a loss), the ROS system will allow this and can result in you claiming a refund.
You would expect the ROS system to calculate your refunds correctly, but unless you chose not to defer the loss, you will claim this refund incorrectly.
Revenue could then in future years detect this and reclaim back this refund.
It is purely down to the person processing the Form 11 online correctly.
If you have had tax refunds for more than 3 years in a row, you may have a problem.
Contact this office for more specific advice on this matter